States continue push to prohibit indemnity clauses

By Keith Goble, Land Line state legislative editor | Tuesday, March 05, 2013

Lawmakers from Idaho to New York are continuing a trend in recent years to prohibit unfair clauses in trucking contracts.

In Montana, the House voted to do away with indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

Rep. Steve Fitzpatrick, R-Great Falls, said it’s about safety.

“If you aren’t responsible and you don’t have to pay for your own conduct, you don’t have much of an incentive to be safe. That’s important, particularly in trucking,” Fitzpatrick recently told lawmakers.

HB347 is scheduled for a public hearing on Thursday, March 7, in the Senate Highways and Transportation Committee.

In neighboring Idaho, House lawmakers voted unanimously to advance a similar effort. H168 awaits further consideration in the Senate Transportation Committee.

Additional efforts in Nevada and New York would add them to the list of states to act in the past few years to change rules on indemnity clauses.

In the past year alone Alabama, Hawaii, Massachusetts, Minnesota and South Dakota acted to forbid the provisions in motor carrier contracts. Starting March 28, Michigan will become the 36th state to adopt the protection from the unfair clauses.

A full list of states, and the laws, where protections are in place is available.

Supporters say that truck drivers doing business in states that have yet to act have little or no choice but to accept the unfair terms.

“This legislation will not limit anyone’s ability to collect for damaged goods but will simply hold the responsible party liable,” Sen. George Maziarz, R-Newfane, wrote in a memo attached to the bill.

Affected contracts typically are defined as a contract, agreement, or understanding between a motor carrier and a shipper covering the transportation of property for hire by the motor carrier, entry on property to load, unload or transport property, including the storage of property.